Deputy Secretary of the Treasury, Michael Faulkender, explains how President Donald Trump’s “Big and Beautiful Bill” aims to develop the economy on “results”.
The characteristic legislation of President Donald Trump includes an astonishing increase of 5 billions of dollars on the debt ceiling – a decision which gives the republicans added a lever effect in bipartite negotiations. With the control of the two Congress Chambers, the Republicans are well placed to use the debt limit as a tool in a classic political edge demonstration.
While the American government is approaching a tax cliff, Republicans could potentially use the imminent deadline to put pressure on democrats to make political concessions. In other words, Democrats should decide between fault or compromise.
Five main policies to know of the “big and beautiful bill”
The debt limit – also called the debt ceiling – is a ceiling fixed by the congress on the total amount of money that the federal government can borrow to pay its existing invoices. Some examples of these financial obligations include social security payments, tax reimbursements and American army wages.
Not increasing the limit of the debt before the treasure is short of money could trigger new demo and royal financial markets. In short, Republicans and Democrats want to avoid a lack of US government because it undermines American economic credibility.
Consequently, discussions concerning the debt ceiling are a powerful negotiation tool on Capitol Hill.
President Donald Trump, joined by the president of the room Mike Johnson (R-La), talks to the media members when he arrives for a republican meeting of the room at the American Capitol on May 20, 2025 in Washington, DC. (Images Andrew Harnik / Getty)
“The way in which these negotiations are generally taking place is, in exchange for the increase in the debt ceiling, discounts of expenditure is made,” said EJ Antoni, chief economist of the Conservative-Leaning Heritage Foundation. “It could look like something as if we agree to increase the debt ceiling by $ 1 billion in exchange for the reduction of about 1 billion of dollars to spend during the next decade. Obviously, these figures could be higher or lower, but it is the typical calculation.”
Antoni told Fox Business that spending reductions largely depend on the ruling party.
“I think that this time, you will see a particular emphasis on the reduction of things such as abuse, corruption, fraud and waste due to the impact of DOGE (the Ministry of Effectiveness of the Government). There was so much exposure to these types of abuse in the federal budget that I think it will be fruit with low maintenance when we arrive at the next discussion on the ceiling of the debt,” said Antoni.
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Michael Strain, director of economic policy studies at the American Enterprise Institute, congratulated the increase in the debt ceiling in the Trump tax and massive expenditure bill.
President Donald Trump signs a decree in the White House Oval Office in Washington, DC, Friday, May 23, 2025. (Samuel Corm / Sipa / Bloomberg via Getty Images)
“The increase in the debt ceiling should be a government routine function, therefore by diverting the increase in an essential bill is intelligent,” Fox Strain told Fox Strain, who is also the scholarship holder Arthur F. Burns in the political economy in Aei, in Fox Business. “This will save a potentially harmful and damaging struggle to increase the debt ceiling.”
“It is certainly possible that the two parties should make concessions next time,” added Strain.
The treasure tells us that we will never make a defect ‘
Trump has already called on the Republicans to resolve the debt ceiling and to avoid a national defect and Antoni predicts that this will remain at the heart of the president’s economic agenda.
“When we examine these future debt ceiling negotiations at the bottom of the road, do not underestimate President Trump’s ability to negotiate,” said Antoni. “On several occasions, analysts and political experts and even economists thought he was not going to be able to obtain as good agreement as he has obtained it in the past,” he added.
The Republicans come together to celebrate the adoption of President Donald Trump’s “great and beautiful bill”.
Critics of the increase in the debt limit argue that it postpones an inevitable calculation with unsustainable public spending. In other words, the Congress pushes the essential debate on flight expenditure and the assembly of the debt on the road.
In addition, Trump’s historic legislation is expected to increase the national debt by more than 3 dollars over the next 10 years – a burden that already approaches 37 billions of dollars.
In May, the Moody’s credit rating agency lowered the American note to a notch below its status of high level of triple-a, citing concerns concerning the increase in debt levels.
Moody’s Downrades US Credit Note on the increase in debt
Romina Boccia, director of budgetary policy and rights at the Cato Institute, called the debt ceiling of $ 5 billions, increases a “striking display of budgetary hypocrisy”.
“The Republicans have long argued that the debt ceiling is one of the few lever points to make discount reductions. But this increase in the debt ceiling is reinforcing this script – this is an increase in the debt of new dollars for new deficits, with much more modest spending reductions that are delayed, Fox Business said.
The president of O’Leary Ventures, Kevin O’Leary, underlines the importance of politics following the victory of the town hall of Zohran Mamdani, the relationship of President Donald Trump and Elon Musk, the “ Grand Bill ” and the state of Tiktok.
Elon Musk, CEO of Tesla And SpaceX, has become one of the noisiest criticism of Trump’s tax and massive expenditure measure, calling it a bill on slavery of “debt”.
Elon Musk launches `America Party ‘after Trump signed a bill on historical spending:’ Waste & Graft ‘
“Stronging the debt ceiling is the only thing that will force the government to reduce waste and fraud. This is why debt ceiling legislation exists!” Musk wrote in a series of messages on X.
“What is the interest of a debt ceiling if we continue to raise it?” Musk asked, who previously put a crusade against unnecessary government spending in Doge.
The billionaire, who spent nearly $ 300 million, supporting Trump and other 2024 Republican campaigns, also called for a “new political party”. During the weekend, Musk announced the training of the “America Party”. Musk said the party will target key seats in the congress.
Musk’s representatives did not immediately respond to the request for Fox Business comments for the purpose of this story.
